By Steve Kozachik
Councilman, Ward 6
During the early years of Rio Nuevo, the City used the Rio Board as an arm of the City. There were few cost controls and project oversight, and millions of taxpayer dollars were mismanaged. Those are not just my conclusions, they came from a 2010 Auditor General’s audit.
Between 2009 and 2011, the Rio Board was operating as an arm of the State Legislature. During that time, $72 million in lawsuits were filed against the taxpayers of this community, run through the Board by those in Phoenix who had appointed them. Again, that’s not just my opinion, but it became clear in December of 2010 when six members of the Southern Arizona Delegation sent a letter to the Rio Board directing them to refrain from signing a settlement agreement with the City and effectively moving the relationship forward.
During that decade plus, the taxpayers saw very little in the form of positive investments into the District that capitalized on the availability of Tax Increment Finance dollars. The taxpayers were critical of the mismanagement, I was critical of it, and the TIF was nearly pulled. That would have been a huge loss to the region.
In the past two years though, a new Rio Nuevo Board has been appointed and the relationship with the City has been reconciled. Perhaps most importantly, the Board is now appropriately at an arms length relationship with the City and the two bodies are working in concert to bring private sector, revenue generating projects to fruition in the downtown core. It was right to be critical earlier, but that was then, and this is now. Now there’s demonstrable progress for which those of us who have fought to restore the relationship can do a little chest thumping.
Throughout this process, the Downtown Tucson Partnership has been doing its best to keep the downtown core a viable destination site. With little in the way of tangible construction coming from the City/Rio relationship in the early years, the DTP has worked on a shoestring to attract people to the area in support of struggling merchants. Add to that the last two years’ streetcar construction, and you’ve got a recipe for running small business operators out of business and causing the downtown core to deteriorate. And yet, that is not what we’ve seen.
The DTP Board has worked effectively to perform its core services well. Those include ensuring the area is clean and safe. Funding for that work primarily comes through a contract with the City, and from self-assessments paid by merchants who occupy space downtown. In addition, the DTP has served as a hands-on advocate and marketing arm for the downtown merchants. Funding for that has also come from the City contract, and from “Outside Agency” dollars awarded on the basis of a competitive RFP selection process. Two years ago the Partnership was awarded $31,000 from that RFP. Last year it was reduced to $25,000. This year, it’s zero. And the City unilaterally reduced its support of the Partnership by another $25,000. In one year, the Partnership has lost $50,000 in funding, all at a time when one could easily argue the Return on Investment is about to explode in a positive way.
The Streetcar construction in the downtown core is nearly done. The fence lines are gone. The merchants can finally see their neighbors across the street. And when they look, they’re likely to see many new faces. There are 500+ student beds about to open. There are 6, going on 7 new restaurants opened on the Rialto block, and nearby. There will be mixed use, office space coming soon at One East Broadway. There’s talk of one, and possibly two niche hotels coming in the very near term. All of this is cause to increase your marketing efforts, not reduce them.
Perhaps more important than the money is the message the City is sending to the DTP Board by chopping the marketing dollars off. If you have an employee who is under performing, you reduce their pay, or give some other form of negative sanction. When workers are over performing, that’s not generally the way effective managers treat them. That’s in fact what we’ve done to the Partnership. The validating message we’ve sent is along the lines of ‘now that you’ve kept us afloat while we squandered taxpayer money over the last decade, and now that the fence lines are out of the way and we can see the fruits of your shoe-leather work, we’ll hand you a broom, say ‘thanks’ and send you off to sweep up the sidewalks. We’ll handle the advocacy.’
The City has neither the staff nor the relationships to carry on that function. The DTP does. This is the time to increase, not to decrease the funding for our most directly involved marketing arm. All successful major Cities have vibrant downtown core business districts. We’re getting close. We finally have the attention of private sector dollars. We have thousands of metro visitors coming to 2nd Saturdays, and just generally coming to visit the new restaurants, theaters and clubs. We have a functional relationship with the Rio Board and will be putting hard dollars into tangible, visible projects.
And we’re cutting off funding for our Partner who has been marketing the area through the hard times.
The City should reverse this funding mistake. We should validate the work of the Partnership with an increase in funding, not a decrease. If the City were paying on the same basis as the small, privately owned merchants, we’d be paying $415,000 annually. We’re dropping it to $365,000. Split the difference – fund those who can show a legitimate ROI on our support. If not, we’re leaving it to chance and simple momentum that people will continue to come into the TIF – downtown- District and spend their dollars. Those are dollars that churn back into the system through the funding mechanism by which Rio exists.
It’s a three legged stool; the City, Rio and the DTP. In this case, just two out of three is a bad way to grow.